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MarketTrak Question/Comment Message |
Posted By: Jim Date: Sun Jun 7, 2009 |
Title: Cycle Analysis Model |
Message: |
Response: where in this equation t is a day number and the unknowns are: a, b, c, d, e, and f. Note that the unknowns c through f are subscripted with the sum over i running from 1 to 6. There are therefore 26 unknowns (parameters). We use a non-linear, least-squares procedure and the last 400 days of djia closing prices to determine the 26 values. Once we know what these values are, we extrapolate time out 20 days to show what we hope is an accurate picture of the future trend of the djia. The model is still experimental and should not be used for trading. Recent tests indicate an accuracy of about 64 percent in predicting the trend over the next five trading days. |